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Tuesday, March 18, 2014

Big Implications for No More Free Alcohol

I'm betting if you read this article from Todd A. Price about the state of Louisiana deciding to strictly enforce a law about free alcohol, you may have missed the bigger implications. Troy Hebert took over as commissioner of the Office of Alcohol and Tobacco Control (ATC) and began a much stricter interpretation of the laws than his predecessor. Todd writes, "as detailed in the ATC handbook, nothing of 'utility value' can be given to bars or retailers." This will change the way events, charitable and otherwise, happen in Louisiana until some changes to this bizarre law are made. (Restaurants are not specifically mentioned but they are included as "bars.")
As is all too often the case, laws regarding liquor are unusual and subject to even more unusual interpretations. Liquor, beer and wine wholesalers are not allowed to give away anything of value to their customers. This includes pint glasses, corkscrews, menu covers and alcohol. Keeping big companies from, essentially, purchasing clients allows for a more even playing field. The concept makes sense but the reality does not. Enforcement is challenging. What business is going to call in a complaint about getting free stuff? Third parties doing so only amounts to hearsay. Big distributors can afford the risk of thumbing their nose at the law despite threat of fines or being shutdown for a few days. Smaller wholesalers might be put out of business by a stiff enough penalty and therefore the playing field tilts unfairly.
Mr. Price does a good job of explaining the impact on fundraisers so I won't re-explain that here. Suffice it to say that, again, the bigger companies can afford to continue their support at a much higher level than smaller operators. The larger impact on the bottom line due to having to donate not only one's cost of goods, but also the potential profit as well might put the pinch on charities around the state. Do most charities even have a liquor license allowing them to purchase alcohol directly from wholesalers?
Here's the big picture that is not addressed. Here's what this means to you, the consumer. One large wholesaler has already stopped doing free tastings. That means their products are no longer available to sample at various retailers and grocery stores because donating bottles to be poured certainly has value. So far, most other companies are doing business as usual on this front but that could change at any second.
Still not concerned? You should be. Martin Wine Cellar is not hosting their Once Upon A Vine event in 2014 and, while I don't know specifically, I'm willing to guess it is over concerns about the new enforcement of this law. At big events like this the wine is always donated and so are some people. Various wholesalers send their staff to pour their wines, this is supposed to guarantee proper information for customers and should also create some incentive to not overpour.
Martin's could certainly purchase the bottles and use all of their staff to pour but the event would suffer. First of all, the ticket price would increase, maybe even double. Second, consumers would potentially be trying to learn about wine from delivery drivers or deli clerks, there are not enough wine professionals at Martin's to cover all those tables. Third, they could reduce the number of tables to allow proper staffing but then the event would be smaller while the ticket price would likely have to remain the same.
How will the New Orleans Wine and Food Experience handle this situation? Will NOWFE no longer have knowledgable people behind the tables (I might argue that happened years ago...maybe I should ask if NOWFE will no longer have the appearance of knowledgable people behind the tables.) Will the ticket price escalate? So far, it looks like business as usual for them but the wines are all donated and so are the people pouring the wine so how can they do this?
In the end, limbo is the name of the game. If you ask questions, you draw attention to yourself. If you ignore the talk around you at least you can claim ignorance if you get caught. It will be interesting to see how this all plays out and to see if any distributor gains some advantage by ignoring the law.